Analysis finds little extra cost for green power

The Plain Dealer
June 01, 2007
By John Funk

Requiring Ohio`s utilities to generate part of their power with "green" sources would add only a fraction of a cent to the wholesale cost of electricity, concludes an analysis commissioned by the Cleveland Foundation and released Thursday.

And if tougher federal emission standards were imposed on utilities, renewable energy would even reduce the cost of power, says the report by consultants ICF International of Fairfax, Va.

A lawyer for manufacturers, however, said even a small increase in electricity costs would hurt.

The foundation, which traditionally spends on the arts and social services, has been a force in the last few months behind a Cuyahoga County task force working to put wind turbines in Lake Erie. It also has sided with environmental groups and the Ohio Consumers` Counsel in pushing for a law called an "advanced energy portfolio standard" to require utilities to generate or buy wind, solar and other forms of green power.

The foundation reasons that a green-power rule would encourage manufacturers of wind and solar systems to move to Ohio, said Richard Stuebi, the foun- dation`s BP fellow for Energy and Environmental Advancement. Some suppli- ers to the industry are already here.

More than 20 states have such a requirement now, he said, and those are the states where wind and solar systems are being built and incorpo rated into utility systems.

The ICF study was aimed at quelling fears of large industrial power users that a renewable standard would increase rates, Stuebi said.

It assumes that beginning in 2010, 1 percent of all electricity sold at the retail level in Ohio would come from wind, solar, or landfill gas and other so-called "biomass" sources.

Over 14 years, the required percentage would gradually increase, topping at 8 percent in 2024.

The impact on costs? No impact in the early years and about one-tenth to three-tenths of a cent per kilowatt-hour in later years.

That doesn`t sound like much, said Samuel Randazzo, lawyer for some of the state`s largest industrial users. But for big manufacturers, even a tenth of a cent per kilowatt-hour would cost $1 million a year.

"The study is for somebody with an advocacy position," he said. "It doesn`t help anybody to make assumptions at the 50,000-foot level and then tell people you can do anything."

Robert Burns, a senior researcher at the National Regulatory Research Institute at Ohio State University, agreed that industry is extremely price sensitive. Even a tenth of a cent per kilowatt-hour, he said, "makes a difference between being competitive or not."

But Burns agreed with the foundation that building renewable-power plants in the state would create jobs in Ohio as well as neighboring states.

Spokesmen for FirstEnergy Corp. and American Electric Power said the companies had not had time to digest the 60-page study.

Neither company favors a renewable-power rule.

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